By the Blouin News Business staff

Club Med looks east

by in Asia-Pacific, Europe.

Two women walk past a Club Med billboard.

Photo Credit: AFP/Getty Images/Philippe Lopez

Club Med’s eyes are firmly fixed on waters half a world away from those that gave the vacation resort company its name. China and other emerging markets, not recession hit Europe, are where the company sees its future growth.

The move by its two largest shareholders, French private equity group AXA and Chinese conglomerate Fosun International, to take full control of Club Med with a bid that values it at $700 million is to provide the financial wherewithal to accelerate a drive into those markets. Club Med aims to operate five of its all-inclusive vacation villages in China by 2015, including three by the end of this year, according to its chief executive Henri Giscard d’Estaing (son of former French prime minister Valery Giscard d’Estaing).

That would make it Club Med’s second most important market after France by 2015. Expansion in Brazil and Russia is also in Giscard d’Estaing’s sights.

AXA Private Equity currently holds 9.4% of Club Med and Fosun, which is the largest privately-owned holding company in China, owns 10%. Their offer is friendly and has the backing of management, which will remain in place if the bid goes through. Priced at a 23% premium to the most recent closing price, it has a good chance of doing so.

Club Med started with low-cost beach huts in the 1950s but has invested heavily in recent years in refurbishing its some 40 resorts world-wide in an attempt to turn itself into a luxury brand. The hope is that China’s tourists — now the world’s biggest spenders on outbound tourism — will buy into that now that Club Med’s traditional European customers can no longer afford to.